tv Your Money CNN May 8, 2010 1:00pm-2:00pm EDT
but right now time for "your $$$$$." america creating jobs again, but there is a long way to go. welcome to "your $$$$$." i'm ali velshi. >> and i'm christine romans, and we'll go through the latest job numbers, but first we want to look at the crisis threatening to sending the world back into recession and contributed to the wildest day in wall street history, ali. >> if you missed it, you'll want to see it again. on thursday, take a look at the dow. it was having a bad day already, but right around 2:40 p.m. something that happened that made it a lot worse. a handful of stocks started to plummet, losing value and taking the dow down with it. >> and suddenly the dow was down 999 points in just the blink of an eye, and, ali, i've been sort of saying it's like the barry bonds' home-run record, yeah, he was a really good baseball player, but there might have been an asterisk there because we don't know what kind of technical factor might have helped the market decline. there were all kinds of rupers about the fat fingers. somebody pressed the button -- >> the rumor was instead of
selling a million stocks, somebody but a "b" for a billion. these are rumors. something technical about this. but before we got there, before something made the market go down late afternoon, and something probably technical that we will see reversed, there was an underlying fear on this market. >> it was a horrible day to begin on the stock market and suddenly you had the market down 400-some points, the world was watching pictures in greece fighting back against police and the austerity measures as the country tries to pull itself out of the budget crisis. its budgets is 13% of gdp. it's trying to figure how to nail down a $146 billion bailout and the austerity plan incredibly unpopular as people are facing dramatic tax cuts -- tax hikes, benefits cuts and the world worried that europe's problems are our problems. >> and that's where it becomes an issue for us. by the way, we'll spend some time breaking down exactly what's happening in greece and why it should concern us. but here's the issue, if this
issue in greece which, by the way, there are issues in portugal, in spain, in italy, in ireland, if these things start to become bigger, remember, these countries are all joined with a common currency and that is making that euro suffer. it's bringing the euro down in value. what happens when the euro is worth less? well, it makes it very attractive for us when we travel to europe, but that's not the big thing. the issue is it makes american exports to europe very, very expensive and hence it threatens u.s. recovery and recovery in other parts of the world as well as europe. >> and i think on thursday, a trigger on thursday, an gel la ameri angela merkel said what happens in greece is the future of europe, and it was a strong statement, this as she was trying to get the government to approve of the bailout. >> they've got the biggest dog in this hunt. >> totally. >> and germany needs to get involved. let's talk about why it matters and why all of a sudden we have to be concerned about
greece. we're joined by a professor of economics at harvard university, former chief economist at the imf and a professor of public policy now. and peter moricci, professor at the university of maryland school of business. gentlemen, thanks to both of you. ken, let's start with you. give us some sense for our audience, who heretofore has probably seen greece as a bit of a side issue that's affecting europe. why do we need to be concerned about what is going on in greece, in southern europe generally? >> well, they're having political chaos there. the european union together is a bigger economy than the united states. it's our big trading partner. this isn't nothing. they're really -- they don't know what to do. they've got greece is in trouble. you mentioned portugal, spain, ireland. they don't know where it stops. there's some people who think they need to bail everyone out. there's some people who think they need to bail no one out. and in the meantime, as you said, the euro's really in free-fall. that's stuff for our exporters.
it makes our goods less competitive. >> ken, the reason we ask you because you have literally written the book on criessiey i crises, hundreds of them. how does this rank up there in the recovery worldwide, how dangerous is this to the recovery that we think is under way? >> well, i don't want to be, you know, too positive, you know, about the situation. but the u.s. has a pretty robust recovery going on. you do see these sovereign defaults after a banking crisis. the governments borrow a ton, just like ours did. not everybody can pay for it. usually, in the past, it's been an aftershock, it's bad, it goes away. if you're stand opening the aftershock, if you're europe, it's pretty terrible. i don't think it's good for us, it will slow the recovery, but i don't think we're talking about a double dip here even if it goes to the worst. >> peter, let's just discuss this. the contagion effect that ken is talking about, may not create a
double-dip recession throughout the world, take me through it entirely, could this sort of thing happen in the u.s.? are we anything like greece? because we're a highly indebted country. >> i think we're a low-grade version of what's going on in europe right now. if uf think about what happened in sacramento in california, it looks very much like the greek situation. more promises than the government can keep. and not enough taxes to cover it, and increasing taxes is the whole answer, which will drive all the business out of california. then roll over to washington, with this new health care legislation and the promises that have been made, which are firm, and the additional savings that are supposed to be accomplished to pay for those benefits, which are soft. you know, i estimate that the u.s. will likely have a $1 trillion budget deficit every year for most of the balance of this decade. the president's budget is very, very unrealistic and optimistic. and so we're facing real problems here. which means americans could be facing much higher taxes while they pay for health insurance that europeans don't have to pay
for, much higher college tuition. the u.s. starts to become insolvent in a way that greece is. >> and this is something that some republicans have seized on, republican from -- from texas, this is a congressman, this is what he said about the u.s., kevin brady. listen -- >> reckless spending greece was forced to seek a bailout from the imf and other european countries, now the greek must slash spending. the dashed expectation among the greek public for salaries and pensions and other benefits have provoked strikes and riots causing three deaths. however, there's another country whose government budget deficit and debt could readily reach the alarming levels found in europe. unfortunately for the american people, that country is the united states. >> but, ken, united states is a lot different than greece, isn't it? >> well, i think peter had it right. we have a low-grade version, but they've got a bad situation. i mean, i think within the next five to ten years, we are going
to have to see big changes in our fiscal policy. i think much higher -- >> what does that mean, big? higher taxes? >> higher taxes. less benefits. we're talking about major changes. our politicians have made unrealistic promises. they have not prepared the public for the belt-tightening that's to come. >> as we get into an election cycle, peter, you've got all sorts of people saying we need to cut spending and we can cut taxes. and christine and i like to push back on this a little bit and say, is that possible? because most economists we talked to, like the two of you say, cutting taxes is not a likelihood in this -- in this economic and fiscal strait that we're in. >> oh, cutting taxes is a unrealistic approach to boosting the u.s. economy. but it's not just cutting benefits, on the other hand. you need to look at what the u.s. government pays for stuff. health care is becoming the elephant on the balance sheet. we're going to spend close to 20% of gdp on health care while the germans spend 12%. what that means we're spending -- you're paying 50%,
75% more for the same health care benefit. i mean, the german's health care is comparable to ours. our drug prices are too high. our administrative prices are too high. we need a major cost-cutting program within the health care establishment. i like to say also, and mr. rogoff may not agree with me, but the universities could use a bit of it too much, americans pay too much and the government pays too much to run the universities. it follows on a lot of things we do in this country where prices and costs are out of control in the public and quasi public sector. >> the two guys employed by universities right there. peter moricci, thanks so much, ken rogoff, a pleasure, as always, hopefully we'll talk soon. >> hopefully you know a little bit more on the situation in europe. we'll discuss it more. it's a big deal. but what you need to know how ties directly into your money and the dow nearly 1,000-point drop on thursday, we'll talk specifically about how to handle your money in this
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all right. i just want you to know i was planning on being here anyway. i didn't -- i didn't roll into new york because i wanted to be in the middle of all this action. but, you know, on thursday we had one of the most gut-wrenching 30 minutes in wall street history. the dow plunged nearly 1,000 points over the course of minutes. understanding what is happening with your money during a volatile market and knowing what to do about it is crucial. >> we brought in our dynamic duo, doug flynn and ryan mac of optimum capital management, they'll tell us how to keep your cool during a wild ride on wall street. a lot of people said to me thursday,ments investors are looking at the tv and making all these trades. i said, i don't think little investors are doing anything. they look at it when they come
home and they missed the huge move during the middle of the day. you shnot be making tweaks to your 401(k) based on what happened on thursday. >> definitely not. and most of the time in your 401(k), you can't really react in the middle of the day. you are only getting the close-of-the-day prices. >> those are mut wall funds that settle at the end of the day. >> right. you shouldn't be trading anyway unless you have a side account that you're trying to -- >> and plenty of people tell me, i was trying to get to my schwab account or e*trade. >> it was crazy. >> you have an action plan. >> tell us specifically about what you think people should do. >> there are key points that you should be doing. if i ask what percentage of your portfolio is in equities and what's in stocks. you should know that. and furthermore, what percentage of those stocks are in international. because if we're going into a stronger dollar and these situations, maybe you want to relook at how much international you should have. >> perhaps you should have less? >> perhaps you should. but it depends where you are, if you only had 5%, maybe you shouldn't.
>> you think -- >> you tend to favor a larger international component? >> i do, i do. but there are times -- you never want to have 100% of anything including u.s. stocks, but there are times to have more and times to have less. but the key is where you are right now. if you're at 20%, you can take a look and adjust, if you're only at 5% you're probably too low to begin with. but the key is these are great times, crisis like this, if you haven't looked, look. take your calendar out and whatever six months is put a date on the calendar and take a look at it then. hopefully nothing will be going on then. and you want to look at your investments when you can have a clear head without all the noise. >> right. >> but right now is interesting so many people have watched stocks up for 14 months with no pullbacks, now they finally got the pullback. maybe it's an entry point for some people that think they missed a rally and they think longer term the u.s. recovery will be okay. >> we can't allow ourselves especially people at home to think like trader. i used to be a trader for five or six years. we would look -- the little blip
on the screen, wow, i wish i was on the street trading this right now, because we saw in 30-second increments and we would trade based on the morning, we could have the whole day down at 9:30 and 31 seconds. we can't allow ourselves to think like that, we have to have long-term perspectives whether the dow went down 1,000 points yesterday or not. what is your perfect situation in how much money do you have to invest? do you have a budget based on what your surplus is and how much you can afford to invest on a daily basis? do you know what kind of companies to invest? what's your plan and strategy? what are you investing for? is it for retirement, a new business? do you want to put cash away in an account for a new home? what's your overall strategy? don't worry about the ups and downs, because the market will do what it's going to do. there were errors yesterday. acn, accenture trading at a penny. procter & gamble taken off the tape at $39. there will be errors but the people at home have to understand what is your long-term strategy. >> doug, you always say you should have a little bit in gold
and other things large-cap stock. gold had a great day yesterday, that means if you got hit on your stocks, of course, gold is a diversionfication. some of the rules you always tell us -- >> they're worth it so days like thursday don't mess you up and mess up your entire portfolio. >> if you don't have exposure to gold in your portfolio, there's risk for inflation. it's pertinent for every portfolio, large-cap, dividend-paying stocks even if you have a bad day in your portfolio, knowing you have a 2% or 3% dividend yield from the equities that can still give you a good income stream. >> it's money. getting money from your investment even if the investment value goes down. >> it's off the lows and we haven't had a 10% correction, if you go to the intraday, it's normal for that kind of run. you have to remember where you were. we're up big from a year ago. >> all right, guys, you always bring some -- some -- >> sanity. >> -- sanity to a noisy mess. ryan mac is the president of optimum capital management plan
and doug flynn is the capital manager for flynn zito capital management. good stuff in there. listen for some people it's loosening up and there are jobs available. we'll also talk about where to find jobs this summer. plus, why some say the oil spill in the gulf will do to the oil industry what three mile island did to nuclear energy. dt orthotic center. backed by foot care scientists, its foot mapping technology identifies the areas you put pressure on then recommends the right orthotic. for locations see drscholls.com. absolutely! i have a lot of stuffiness at night. it wakes me up. i have allergies. ♪ you're right. i'm getting more air. -oh, yeah. -oh, wow! [ female announcer ] for two free samples, go to breatheright.com. welcomerewards from hotels.com. see when i accumulate 10 nights, i get one free. and...they let me choose where to use them. the loyalty program he signed us up for has all these restrictions, blackout dates,
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the deep freeze is thawing. >> it is, yeah. >> jobs are coming back. companies are hiring again, but do you know what, there's an awful long way to go, ali, we want to be very clear about that. for some people in this economy jobs are finally starting to present themselves, for others it's a record situation of long-term unemployment. it depends on what side of the
fence you're on. you can see from the four of the past months -- five of the past six months. >> five of the past six months we've had gains. >> and the unemployment is 9.9%. >> the jobs are getting good. we've seen serious gains in april. this is a tough one, look at the 80,000 jobs gained in professional business services. 56,000 because of the census, for all the viewers saying it's all about the census, it's not. leisure and hospitality, 45%. the bottom line, let me get glasses, chwhat does it say, manufacturing, up 44,000. we thought it was dead. >> i don't think it's much solace for the millions of manufacturing people that have lost their jobs. >> many are saying what are you talking about, my town and my industry's been destroyed? it's really a double-edged story. >> it is. and we have the managing director of research institute, william rodgers, rutgers business professor, former chief
economists with the department of labor. they're both here. >> you have the same half glass in front of you, is it full or is it empty? >> it's filling. it's filling. it's half full and it's filling up, but it's going to take a long time to fill it up. you know, the faucet isn't on high here. >> is it enough to drink or is it just a glass of water? >> household survey, 1.5 jobs this year created. now, private sector over the last couple of months on the payroll survey, about 200,000. pry sat sector jobs -- >> we want private sector jobs. >> so, you're seeing an established trend of job growth which is starting to heal the labor market, but it's going to take years to heal that damage and there's a lot of long-term displaced people who are being left behind by these jobs gains. >> 46% of the unemployed have been out of work for six months or longer. unheard of in a modern economy. unheard of in western civilization. am i overstating it, 46% of people been out of a job six
months or longer. they've really been left behind. >> that's correct. i think over the last few months some of the reentrants into the labor market have been the short-term unemployed, unemployed less than five weeks or ten weeks or so were and so that 46% is starting to rise because the way the economy starts to correct itself, the labor market starts to correct itself, it brings in people with the least -- the shortest bought of unemployment. but i'm not saying i don't think it's half full. i'm still about 25% or a quarter of the glass is full, but we are moving in the right direction. >> the direction is key. >> the direction is key. i think this is a great report for main street, for people to say, you know, that we are moving forward. that work picked up a bit. but it also didn't surprise me. what happened to productivity growth numbers the other day. they fell back in line, down to about 3.6% which suggests -- >> what does that mean? >> sure. that prior -- in the fourth quarter, it was up to 4.2% like employers are really pushing
their employees. >> you're getting more work out of me for the same pay. >> but it dropped 3% because you can't push people that far. and that's why we saw hours worked begin to rise and you saw about 200,000 of these jobs were full-time private sector jobs. >> and you're seeing very importantly income also being supported by the jobs recovery. this is very important. the early stage of the recovery, a few quarters ago it's a spurt in inventory growth pushes gdp up quickly and then you have to hand it off, you can't have a recovery based on that. the consumer has to get involved and the consumer is getting involved but they can't hang in there unless incomes are being supported, and so this jobs recovery here is helping to support incomes nationwide. >> this is the number that i saw that really said that consumer spending was $36 billion in the most recent period, but incomes were $32 billion. where are they getting that extra money? where is the $4 billion extra dollars? people are feeling more confident and dipping into savings, right? you have to be careful. >> do you. you do. with savings it's interesting
there's an inconvenient truth for the negative story on consumers with savings. the story we've all heard in the middle of the last decade savings went negative and really set us up for this recession. lo and behold they revised the numbers and there was no negative savings rate, it went down but it stayed positive. so what that means nor today that savings doesn't need to go negative in order to have some consumer spending, okay? >> you can spend money. you don't have to go into the hole for it. >> the point to come back to the underlying preface of your concern, you know, it's going to be another four to five years -- >> sure, absolutely. >> -- based upon sort of reasonable job creation numbers. >> right. >> and also there's another shoe that's going to potentially fall and that's going to start in september, in new jersey, two-thirds of school board budgets were shoated down. >> right. >> which means there will be even more cuts to teachers. >> right. >> we're not cutting curriculum coordinators, we're cutting people who are actually in the classroom with kids. >> right. >> so, you'll see increased class size, so that's going to be a potential drag on the
economy. >> it's really important that the private sector set it up. >> very interesting conversation, guys. thanks very much. there's no surprise that it will take us a while to get back, but as you both agree, at least we've got stuff in the right direction. thank you both. bill is a former chief economist with the u.s. department of labor and he's at rutgers university, and lakshman is the national director of the policy institute. oil and politics, how do they mix? a look at the what the spill in the gulf of mexico could mean for the future of this country's energy policy. can turn romantic at a moment's notice. and when it does, men with erectile dysfunction can be more confident in their ability to be ready with cialis for daily use. cialis for daily use is a clinically proven, low-dose tablet you take every day, so you can be ready anytime the moment's right for you and your partner. tell your doctor about your medical condition and all medications and ask if you're healthy enough for sexual activity. don't take cialis if you take nitrates for chest pain,
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i think i'll go with the basic package. good choice. only meineke lets you choose the brake service that's right for you. and save 50% on pads and shoes. meineke. well, when it comes to the oil spill in the gulf of mexico, all eyes are on containing the leak and launching a massive cleanup operation, but what are the long-term implications, is this the environmental disaster that could change our country's energy policy for good? we're joined by stephen leeb, author of "game over." he's an expert on oil. i was talking to people during the week and a number of times they said what's the cost of disaster. i said, we can add up the cost of cleaning up the oil, but
we're going to lose species of birds, some sea mammals, the shrimping industry decimated. i don't know what the long-term cost of this. >> i don't think anybody does, ali. we don't know at this point whether they can even cap the thing, and then, heaven forbid, it could be, you know, just enormous, but what people have to realize is when you start doing a lot of this drilling, you're going to have accidents. i mean, i did a simple-minded calculation, admittedly with nuclear power, but the same principle applies. let's say you build 1,000 reactors worldwide, which is not an unrealistic number over the next 20 years. let's say that the probabilities of a failure in a 20-year period for any particular reactor is 1%. >> right. >> so, you're dealing with a reactor that's likely to be with you 99-1 this reactor's not going to have a problem for the next 20 years. do you know what the chances are of a particular failure that one of these 1,000 will fail?
>> what? >> about 23,000-1 in favor of a failure. if you are going to -- yes. this is just pure, simple statistics, take out your calculator, .99 to the 1,000th and you'll get 20,000-1, and if we're going to start massive offshore drilling, and we desperately need to because we're out of oil, you're going to have more than one accident, it's just that the odds in your favor. we don't know what the odds were, ali, this was only three miles deep as i understand. the stuff they're doing off brazil could be four or five miles deep and you're going through massive salt flats. we don't have the science to say what the odds are on an accident. but they're not minimal. they're not nominal. we've already established that by what's happened here on the coast. >> you say we need more oil? >> yes. >> some people look at this and say this is a wake up call that we need to focus on wind and solar in this country, but wind and solar can't make up all of our energy needs.
>> not right away, but we desperately need someone to sit down with pencil and paper to say how are we going to make this transition how are we going to go from fossil fuels, which we're obviously, you know -- when you see something like this happen, you pointed out so well about the ecological damage and you don't even know what damage. >> and lives were lost. >> yeah, not to mention 11 people died. >> yeah. >> i mean, you know, you have to sit down with a bunch of scientists and say, what is it going to take to segue from nonrenewable fuel to renewable fuel, and i'll tell you one country, which i think gets it right now, and there's an op-ed piece in the -- in "the new york times" this week, i think it was friday, saying china. china all of a sudden has taken the lead in developing renewable fuels. >> which is ironironic, china
doesn't have an environmental record, it's purely energy need. >> christine, it's my take on it. just the fact that we're doing this offshore drilling. just the fact that we're doing it is a sign of desperation. the fact that, you know, the brazilians are going to go five miles deep, you know, past -- into the ocean floor? we know less about the ocean, i've heard this, i can't back it up, but it's an anecdote that we know less about these areas than we do about the moon. i mean, it makes almost as much sense to be drilling for oil on the moon than it does deep in the ocean. >> some have said it's like a mars landing. >> right. >> it's like a mars landing, the engineering involved. >> what do we take away from this? is, like, a three mile island type of thing? will it make us rethink the safety of oil or will it go 8 away as these things often do and we'll go on drilling? >> because of the desperation involved, i think we will keep on drilling, but we have to pray, it's a wake-up call that we cannot xawnt on nonrenewable
fuels. we cannot count on oil. we cannot count on natural gas. i mean, you have the same thing going on with the shale gas deposits. you don't know how much you're fouling up the environment with them. >> so amazing to think about all of the oil gushing, literally gushing into the gulf, and could destroy this region is still a tiny symbol of the marketable oil that is being used. it's spill off and it could hurt so much. >> it boggles the mind. if they don't succeed, 5,000 barrels a day. i've heard estimates could go up to 40,000 barrels a day, just imagine. >> there's a lot of pressure behind that oil coming out of the ocean floor. >> the point is we just don't understand and we don't know, and when you start doing things that you don't know and cannot model, you shouldn't be doing them. >> yep. >> and obviously we don't know what we're doing. >> yes. >> i mean, we have some idea, but when it really comes down to it, this is just, you know, a pig in a poke drilling this deep. we really don't understand it is.
>> $600 million platform -- >> to boot. to boot. >> unbelievable. >> i think we're learning a lot about what you're saying. by the way, your book, "game over." i mean, you've written a lot of books on oil and stuff, but "game over" really does deal with that we don't know what we're getting into. good to see you, stephen. >> good to see you in new york. >> good to be back here. elizabeth warren joins us to talk about why she's so fired up about creating an agency to protect you, the consumer. wondering about your retirement plan? who isn't? retirement planning is all questions. how long? how much?
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doesn't happen again. >> and we're still arguing whether we need more or less, it's interesting how you get away from it seems to lose urgency? that's right, when it comes to financial reform, there are so many solutions proposed and argued over. but our next guest says in order to have a new economy we need to create new rules. >> elizabeth warren oversees t.a.r.p. and she's a professor at harvard law. tell us how you see the reform package that is working its way through congress. we've got one passed by the house and then we've got something working through the senate. is it going to help achieve the goals that you're looking for? >> well, i think so. remember that the reason behind the idea of a consumer regulatory agency is that right now we have seven different agencies in washington, all of -- each of which has a piece of consumer financial
regulation. and each of which, quite frankly, has failed miserably. so that we started this whole economic crisis one bad mortgage at a time. lousy products sold out there that had way too much risk in them, not only at the household level but then could be aggregated all the way into the market, and ultimately too much risk ends up in our retirement plans and the stock market and everywhere. the idea behind this agency is, look, we're going to cut the stuff out of the other agencies and put it in one agency, slip it down, make it accountable, and make it focused, and the principal focus is to bring down the size of these consumer contracts, so people can actually see them, read them, and compare them. >> i think the american people don't really trust these parties are going to be able to get it together. do you think that's an urgency that they're going to do the right thing? >> well, you know, i think it's a tough question. i think you're right. so here's -- let's do the good
news, the bad news. the good news is people get by and large what this agency is about. there was a terrific poll from aarp, it's been about six weeks ago now, asking should an agency in washington like be able to -- should it force credit card companies and bank checking account issuers and car lenders to make contracts shorter and readable, what we were just talking about? are you ready for this? 96% of americans said yes. i agree. that's what should happen. 91% of them said, i agree strongly that's what should happen. same, republicans, democrats, independents. they don't see this as a partisan sort of issue. now, the flip side of that is that the bank lobbyists in washington have targeted this as the number one thing they want to kill. >> yes. >> they announced last summer it is dead, dead. this thing has been dead so many
times -- >> which for our viewers might be a good sign that they're interested. but there is opposition, you and i have talked about this, it's very -- look, i find it different doubt understand some of the opposition to this, because we should all admit that something was broken that led to -- or contributed to the financial crisis we were in. listen to what senator kit bond had to say about it -- >> i believe that the current provision in the bill, the new consumer financial protection bureau, is a superbureaucracy, that would have authority to impose expensive government mandates and micromanage any agency that extends credit. i ask why would we be creating a new bureaucracy that could empower the special interests? >> there are some republicans who say it won't do any good if it's at the fed because it can't do anything at the -- is it a superbureaucracy? >> so, i love this. it is both too powerful and not powerful enough at exactly the same moment. you know, mostly what this agency would do is it would take the existing laws that are
already there, but that because they are scattered among seven agencies, i'm going to be quite frank, that makes it easy for the special interests to capture those consumer interests that are supposed to be there. and i'll give you an example of that. theocc, that's the federal bank regulator, on their list of things to do, down in the box is consumer protection. there's been some really strong disputes between banks and consumers or groups of consumers over things like atm fees, over things like credit card terms, over arbitration clauses, lots of things, right? and you can kind of say, well, you know, i get this. the occ has gone in and entered the litigation, brought the power of the government into the middle of this litigation, and guess who's side they have been on 100% of the time? the banks. they've never entered in the last few years on the side of the consumer.
they are there to protect those banks from those big tough ornery consumers, who want to do things like have contracts that they can read or not be tricked into ending up with 48% interest rate. >> elizabeth warren, thank you very much. really appreciate your time today, have a great weekend. >> thank you. >> this is a passionate debate as elizabeth said. in a moment we'll talk about the objections to reform so you can under them a little bit better. plus, this summer is going to be tough for the traditional summer job. but there are some jobs out there. we'll tell you where they are and how to get them. ♪ [ woman ] nine iron, it's almost tee-time. time for new zyrtec® liquid gels. they work fast. so i can get relief from the pollen that used to make me sneeze, my eyes water. with new zyrtec® liquid gels, i get allergy relief
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reform for the financial system. we want to statalk to the other side of the debate, mark zandi, you are not anti-reform at all, you want to give us some sense of what some of the concerns or opposition to reform might be. >> right. well, there are many. you heard one from one of the republican congressmen that -- that regulation -- that the reform will lead to overregulation, that it will stifle the availability of credit and raise the cost of credit for consumers. so, i think that's a legitimate worry, and something that needs to be considered in the reform process. but ultimately at the end of the day, reform is necessary. it's clear that the financial system did fail us. millions of bad loans were made and the system needs to change, and we have to make sure that we don't change it to such a degree that it chokes off the credit that we all need to go out and hire people and to spend on the things we want to spend on. >> one of the things that elizabeth warren was talking about with respect to contracts,
mark, is that if you simplify contracts between people like their mortgages or like their credit cards and people understand them well, we really can start to tackle personal responsibility. we can actually -- people can't sort of get out there and say i didn't know what i was getting into. >> no, i think that's fair. i mean, i think it's clear that many borrowers who got loans really did not understand them. and that is a failing of our regulatory process. i think it's important that regulations require lenders to provide all of the necessarissc information. i think also it's a failure of our educational system. when i got out of high school, i knew how to make a pretty good omelet, but i didn't know what a mortgage was or how to balance a checkbook. i think that's important today, we need to invest in the education of kids so when they do get out into the world they are able to tackle the big financial problems. >> mark, we can't have you here without asking you about greece and the financial debacle late
this week. are you concerned at all about the u.s. recovery because of what we're seeing elsewhere around the world? is that kind of the thing that is the big thing right now talking about our money? >> yes, sure. i think the greek debt crisis is very serious, and it neated to needs to be quelled by policymakers. because resolved, it will undermine stock markets across the globe, including our own. the rising stock market has been vital to the recovery. it's why consumers are out spending again and businesses are starting to hire again. it's very important that policy makers put an end to this quickly so we can get back to the business of creating jobs. >> mark, good to talk to you. mark zandi, economist with moody's economy.com. next, where and how to find a job for the summer. first, so many small dairy farms are struggling to survive. meet some farmers bypassing the u.s. pricing system and getting milk from cow to store in just 36 hours.
>> i was a farmer. been doing it for 50 years now. i became an orthopedic surgeon. children were educated and i love dairy farming and i said i would retire and i did in '98, and go back to full-time dairy. sweetie pie, what are you doing? i put on a registered herd here and realized after a couple of years i was getting awards for my quality of milk and i knew there were a couple other people getting awards for milk quality, but not getting paid for what it cost to produce the milk. then 2001, i was receiving for the milk what i received in 1977, same price. no accountability for inflation or anything. i said, let's see if we can bottle our own product under our own label and created the hudson valley fresh label.
none of us use artificial hormones to stimulate production. we take care of our cows in a national way. we feed them our own hay and corn. we pasture them in the summer. you cannot afford to take care of cows in this fashion and not get paid for it. we are now nine farms. first four months i delivered my stuff in my pick-up truck to get stores to try it. now we are purchasing our third truck. we are well over $100,000 a month. every pound of milk in the hudson valley fresh label, the farmers receive $21 for that milk. they are always doing the same hard work, producing a quality product. instead of getting the $13 or $14 for that milk, they receive $21. in contrast to commodity prices which go up and down, up and down and fluctuate, we don't change. the farmers in this area very depressed. they are very down. farmers in general are optimistic. they are proud people. they don't want to owe anybody
anything, but their father survived in farming, their grandfather survived and now they can't? they just want to earn a living wage from the land. that's the total mission. nothing more, nothing less. oof! i hope he has that insurance. aflac! you really need it these days. how come? well if you're hurt and can't work it pays you cash... yeah to help with everyday bills like gas, the mortgage... ...and groceries. it's like insurance for daily living. so...what's it called? uhhhhh aflaaac!!!! oh yeah! that's it! aflac. we've got you under our wing. a-a-a-aflaaac!
( tires squealing ) to have bad tires. come to meineke and save $20 on two or more tires. at meineke, you're always the driver. you worked summer jobs, right? the most i worked were three summer jobs at a time. it was a profitable summer. >> i liked it, but there was work available. harsh lesson for folks hoping to
land a summer job. even as the nation's unemployment situation starts to get a little bit better, jobs for teens continue to be extremely hard to find. >> i want to show you a chart that shows how hard it is for your teenager to find a job. no surprise here. it shows a tremendous drop in 18 to 23-year-old workers with a summer job. youth summer employment has fallen from nearly 60% to less than 50%. >> there are still opportunities out there. we want to let you know about what they are. torre johnson, author of the book "from fired to hired." this was obvious as kids. what is the best way for a student looking for a summer job is? it still pounding the pavement or the internet or social media? >> i think it's a combination of both. i think there is a danger with the internet that you rely exclusively on the internet and think it's a false sense of accomplishment. i'll go online and do my thing
and hope for the phone to ring. there are good websites you can look at. one of my favorites is snagajob.com. it's specifically hourly seasonal work. teens4hire.org, coolworks.com, craigslist. those are for people looking specifically for teens looking for summer employment. >> are they free? >> yes. those are free. >> you also say that you should maybe try to start a business. you're going to have to be a freelancer and figure out where the money is for yourself. >> sure. we hear all about entrepreneurial teens. it's a great option if you can't find somebody to hire you to hire yourself by farming yourself out there. think about the things you already know how to do. most teen does do things like babysitting. it's about going into your neighborhood and talking to people. maybe if you're going to mow people's lawns. you talk about using the internet, i know teens who are teaching some of their parents'
friends how to use facebook or going into small businesses saying i'll give you that one-hour tutoral. it's something teens know intuitively. would anyone pay you for that? yes. the biggest issue is pounding the pavement. that's what matters most. if you can walk into the drug store, grocery store and say, hey, my family shopped here since what is a toddler and now i want to work here. showing a connection. walk the mall, especially into some of your favorite stores and say, i've always shopped here. not much training involved with me. why don't you give me a chance. going into a restaurant. thinking about what's familiar in your area. using that personal connection i think is one of the things that works best in a teen's favor. >> that is good advice. i'm energized by it already. i've been in a few malls recently and i've seen signs, "we're looking to hire." good advice. tory good to see you again.